Deals of the Day: Good Deal? Groupon Files for IPO

Deals of the Day gathers all the biggest news of the morning related to mergers and acquisitions, bankruptcies, financing and private equity. Deal Journal’s homepage is http://blogs.wsj.com/deals. You can see real-time updates of our posts and our favorite deal-related articles on other Web sites through our Twitter feed, @WSJDealJournal.

Capital Markets

Groupon: Groupon filed to go public in a deal that could value the e-commerce company at as much as $20 billion, a hotly anticipated offering that could test the strength of a tech-investing frenzy. [WSJ]

Prada: The Italian fashion house, which is preparing for an IPO of about $2 billion in Hong Kong, said it expects profit to rise as it widens its foothold in Asia. [Reuters]

MGM China: Shares of MGM China, a casino joint venture between MGM Resorts International and a daughter of Macau gambling tycoon Stanley Ho, were up 1.8% on their first day of trading in Hong Kong Friday. [WSJ]

Mergers & Acquisitions

Foster’s Group: Molson Coors Brewing Co and Mexico’s Grupo Modelo are exploring a joint bid for Australia’s Foster’s Group Ltd , a source said, amid talk further suitors may emerge for the maker of VB and Cascade beer. [Reuters]

Will Barclays going shopping in Spain? British bank Barclays Plc could be planning to take advantage of a state-driven overhaul of Spain’s banking system to get assets on the cheap. [Reuters]

Sealed Air: The food-packaging maker, which is buying Diversey Holdings, received $3.8 billion in committed loans to fund the purchase as financing for mergers and acquisitions increases. [Bloomberg]

BSkyB: News Corp and regulators have agreed in principle a deal to remove the final obstacles to a bid by Rupert Murdoch’s group for full control of British Sky Broadcasting. [FT.com]

Companies & Industries

Chrysler: Fiat has an agreement to buy the U.S. Treasury’s remaining 6% stake in Chrysler, putting itself in a position to acquire most or all of the company’s shares held by others. [WSJ]

Legal & Regulatory

Financial regulation: Top U.S. and European policy makers continued wrangling over global efforts to prevent another financial crisis, including the best way to ensure banks have enough capital to withstand potential losses. [WSJ]

Insider trading: A federal probe into insider trading at the FDA, which has focused on an agency chemist, is expanding to look at other government employee. [WSJ]

Madoff: Eric S. Lipkin, a second-generation employee of Bernard Madoff, is expected to plead guilty to criminal charges next week and cooperate with prosecutors trying to pursue cases against other individuals. [WSJ]

Goldman Sachs: The Wall Street firm received a civil subpoena from the Manhattan district attorney requesting information related to a U.S. Senate report on its business dealings. [WSJ]

Financial Institutions

Moody’s: Moody’s placed the debt ratings of Bank of America, Citigroup and Wells Fargo on review for possible downgrade. [WSJ]

Related: Bank stocks just can’t regain their mojo. And even with valuations back at levels of last fall, there is little sign of respite for U.S. banks. They are battling on multiple fronts. [Heard on the Street]

Comments (2 of 2)

I laugh at the fact that early investors are cashing out so early. In fact, the rushed feeling of the Groupon IPO makes sense. Founders and backing VC's view this as the score of a lifetime and are ready to hop ship with capital, while the public can try to play with this crappy to-be stock.

It's ballooning operating expenses can be explained by the fact that unlike Facebook, Linkedin, or other social media businesses, Groupon is not almost-100% crowdsourced. Facebook and Linkedin rely on users enthusiastic enough to make profiles and fill them up with interesting content that other users find value in. Groupon relies partly on users to "activate" deals, and largely on expensive salespeople to source deals. No wonder they have 7,000 employees. They're mostly sales people. Short this one.

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About Deal Journal

Deal Journal is an up-to-the-minute take on the deals and deal makers that shape the landscape of Wall Street, including mergers and acquisitions, capital-raising, private equity and bankruptcy. In short, wherever money changes hands. Deal Journal is updated throughout each trading day with exclusive commentary, analysis, data, news flashes and profiles. The Wall Street Journal’s David Benoit is the lead writer, with contributions from other Journal reporters and editors. Send news items, comments and questions to deals@wsj.com.